Grade 10 Unit 1 Test revision

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Questions and Answers

What is the key difference between strategic alliances and joint ventures?

Strategic alliances do not form new business entities, joint ventures do.

Which best describes a multinational corporation?

A corporation operating in multiple countries to save costs.

What is the primary purpose of offshoring for companies?

To reduce the cost of labour by relocating operations to another country.

What is a common reason for companies to engage in mergers?

To increase efficiency and face competition better. Signup and view all the answers

How do most businesses ensure ethical behavior among their workers?

By having a code of ethics that guides employee behavior. Signup and view all the answers

What defines a retail business?

Generating profit by selling things to consumers Signup and view all the answers

What is a domestic transaction?

Selling items within the same country Signup and view all the answers

What benefits can businesses gain from international trade?

Increased quality of goods Signup and view all the answers

Which type of business generates profit by doing something for other businesses or customers?

Service businesses Signup and view all the answers

What is a key advantage of international markets for producers?

Increased production quantity Signup and view all the answers

What distinguishes non-profit organizations from other types of businesses?

Goal is not to make a profit Signup and view all the answers

Under what financing method does one use their savings or investor savings to run a business?

Equity financing Signup and view all the answers

How does international trade impact labor costs in developing countries?

Leads to exploitation of workers Signup and view all the answers

Why might some businesses prefer producing goods in countries with less strict environmental regulations?

To avoid strict environmental regulations Signup and view all the answers

What is the primary advantage of joint ventures in international business structures?

Match the skills and expertise of two different businesses Signup and view all the answers

What is the purpose of using tariff barriers in international trade?

To limit the entry of certain goods like narcotics and goods made from endangered animals Signup and view all the answers

How do non-tariff barriers impact international trade?

By setting high quality standards that foreign businesses find difficult to meet Signup and view all the answers

What does a trade surplus indicate for a country's economy?

The country is exporting more than it is importing Signup and view all the answers

How do tariff barriers impact the prices of imported goods?

They raise the prices to protect local industries Signup and view all the answers

What are some examples of non-tariff barriers to international trade?

Setting strict safety standards that foreign businesses find hard to meet Signup and view all the answers

What is the key advantage of a sole proprietorship?

Ability to keep all profits Signup and view all the answers

What is the main disadvantage of a sole proprietorship?

Unlimited liability Signup and view all the answers

Which type of partnership has partners with unlimited liability for each other's debts?

General partnership Signup and view all the answers

What are the two types of partnerships mentioned?

Limited partnerships and General partnerships Signup and view all the answers

In international business, what does interdependence mean?

Countries depend on each other for survival Signup and view all the answers

What distinguishes a private corporation from a public corporation?

Availability of shares in the stock market Signup and view all the answers

What defines a crown corporation?

Government control Signup and view all the answers

In what aspect do franchises differ from other business structures?

Ownership model Signup and view all the answers

What is a distinctive feature of municipal corporations?

Government control Signup and view all the answers

What is the main goal of most businesses?

To make a profit Signup and view all the answers

What defines an entrepreneur?

Someone who starts their own business Signup and view all the answers

What do economic resources, or factors of production, refer to?

The means through which goods and services are made available Signup and view all the answers

Which type of economic resource refers to materials that come from the earth, water, and air?

Natural resources Signup and view all the answers

What is the distinction between a need and a want?

Needs are essential for survival, wants add pleasure to life Signup and view all the answers

Which term describes a product that is no longer used or produced?

'Obsolete' Signup and view all the answers

What do entrepreneurs do in response to competition?

They innovate and offer better products or services Signup and view all the answers

What role do human resources play in creating goods and services?

Creating goods and services Signup and view all the answers

What is the primary impact of competition on innovation in businesses?

Competition drives innovation and new inventions Signup and view all the answers

Study Notes

Strategic Alliances

Agreements between businesses to achieve common objectives without forming a new business entity
Each business commits resources to achieve a shared goal

Multinational Corporations

Corporations operating in more than one country
May operate in multiple countries to save money, e.g., by having production plants in countries with cheap labor
Examples: having headquarters in a country with good leadership talent

Offshoring

Relocation of a company's operations to another country, often to reduce labor costs
Popular offshoring destinations: India (call centers and IT work) and China (manufacturing)
However, as China develops, labor costs are rising, and manufacturers are moving to Southeast Asia

Mergers

Two companies joining to form one company
Reasons for merging: increasing efficiency in the face of competition
Examples: AOL-Time Warner and Chrysler-Daimler-Benz

Business Ethics

Ensuring workers behave ethically through a code of ethics
A code of ethics outlines how employees should respond in certain situations
Fraud: the crime of lying and deceiving for personal gain

Types of Businesses

Retail businesses: generate profit by selling goods
Manufacturing businesses: generate profit by turning raw materials into finished products
Service businesses: generate profit by doing something for other businesses or customers
Non-profit organizations: goal is not to make a profit, e.g., charities

Financing Options

Debt financing: borrowing money to run a business
Equity financing: using one's own savings or investor savings to run a business

International Business Structures

Joint ventures: two businesses join to create a separate business entity
Examples: Sony-Ericsson

International Trade

Benefits:
- Access to markets
- Cheaper labor
- Increased quality of goods
- Increased quantity
- Access to resources
Costs:
- Human rights and labor abuses
- Environmental degradation

Barriers to International Trade

Tariff barriers: taxes on certain imports
Non-tariff barriers: standards for the quality of imported goods
Examples: limiting imports to protect local industries or prohibit certain goods

Balance of Trade

Relationship between a country's total imports and total exports
Trade deficit: paying more for imports than earning from exports
Trade surplus: earning more from exports than paying for imports

Forms of Business Ownership

Sole proprietorship: owned by one person, advantages: keeping all profits, disadvantages: unlimited liability
Partnership: owned by two or more partners, advantages: shared responsibilities, disadvantages: unlimited liability
Corporation: distinct legal status, owned by shareholders, advantages: limited liability, disadvantages: complex structure
Co-operatives: owned by members or workers, primary interest is to serve members, not to make a profit
Franchises: one business licenses its name, procedures, and expertise to another business

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